Once again we turn to the Fed to give us the "official" word on the recession. According to Fed Chairman Ben Bernanke, the recession has bottomed out. And although the recovery has been uneven, the U.S. manufacturing sector has held up well and is likely to continue to expand, says the Manufacturers Alliance/MAPI. The group's September composite Index of 77 percent represents the fourth straight quarter that the index has registered over 50 percent - the defining line between contraction and expansion. Compare that with the 38 percent Index in September 2009, reflecting the prior year's manufacturing contraction.
If we consider which technologies are on the leading edge of manufacturing growth, nanotech comes to the forefront. Nanotech is dramatically changing the manufacture of an array of industrial and consumer products - from aircraft and auto parts to biomedical and solar energy materials. Specifically, nanotechnology is also being applied in the $165 billion U.S. electronics industry, another economic driver.
In our cover story this month, we explore "Cities Hot for Technology." The profiled locations are among those with the resources that are fueling the growth of high-technology firms in diverse fields including biotech, IT, renewable energy technologies, aerospace/defense, digital media, and a host of other high-tech endeavors. What does it take for a location to be a high-tech hub? Our writer found out it takes at least one major success story, a major research institution, high-tech talent, venture capital availability, the proper infrastructure in place, and collaboration between business, government, and academia.
The question now becomes, will manufacturing's production of technology products create enough U.S. jobs to further the nation's economic recovery? Andy Grove, senior adviser to Intel and the company's CEO from 1987 to 2005, offered up an interesting perspective in Businessweek (July 1). He warned, "Plowing capital into young companies that build their factories elsewhere will continue to yield a bad return in terms of American jobs." He further noted, "Without scaling [i.e., production] we don't just lose jobs - we lose our hold on new technologies.[and] ultimately damage our capacity to innovate."
And that brings us back to job growth. Economists advise that although the economy grew 2 percent in the third quarter, this wasn't enough to impact the 9.6 percent unemployment rate. Since consumer spending accounts for 70 percent of national economic activity, consumers need to spend more to drive economic growth, say the pundits. Grove seems to be saying that if we only invent and design all those technology products that consumers are buying in the U.S. but then shift their production overseas, how many jobs are we going to create at home? It's an interesting point to ponder when considering our jobless recovery.